US-China US$200 billion trade deal leaves European suppliers feeling left out


·         China’s focus on buying more agricultural products from the US will ‘negatively affect other suppliers’, chief economist at Mercator Institute for China Studies in Berlin says

·         Agreement ‘has effectively sucked most of the air from the room when it comes to agricultural deals, and left firms and governments frustrated’, EU diplomat says


Keegan Elmer in Beijing, South China Morning Post (China) 

21 Jun, 2020


China’s commitments under a trade agreement signed with the United States in January have left European firms feeling frozen out of the world’s largest consumer market, observers say.


Under the deal – reached in an effort to put the brakes on a trade war that started in July 2018 – Beijing promised to buy an additional US$200 billion worth of American agricultural products over the next two years.


That pledge was reiterated this week when US Secretary of State Mike Pompeo and Chinese State Councillor Yang Jiechi met in Hawaii to discuss a number of thorny issues between the two countries, according to reports from the US side.


For European firms, who had made some inroads into Chinese markets during the trade war – as Beijing sought alternatives to its usual US suppliers – the phase one deal, as the January agreement is known, came as a body blow.


According to Max Zenglein, chief economist at the Mercator Institute for China Studies in Berlin, said European firms saw the US-China deal as “highly problematic”.


“China’s focus on imports from the US will negatively affect other suppliers,” he said.


Those concerns appear to have been borne out by official Chinese figures.


In 2018, with the trade war under way, Beijing granted approval to 46 meat companies from European Union (EU) countries to export their products to China, more than double the figure for the US.


Last year, as China grappled with a shortage of pork and other meats due to an outbreak of African swine fever, which killed an estimated 60 per cent of its pig herd, the number of EU meat producers granted approval to export more than doubled to 112.


EU sales of agricultural products to China in 2019 rose 38 per cent from the previous year to €15.3 billion (US$17.1 billion).


But then things began to change. In the first 10 months of 2019, Beijing granted no new approvals to American meat exporters, only to give almost 350 of them the go-ahead in November and December.


The trend has continued in 2020...


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